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The art funda

Forget blue-chip stocks. Invest in art and you could become a millionaire one day, writes Vivita Relan.
None | By Vivita Relan, New Delhi
PUBLISHED ON JUL 27, 2006 03:39 PM IST

Tyeb Mehta’s Mahishasura fetching Rs 7 crore at the Christie’s, while Francis Souza’s Lovers, being sold for Rs 6.5 crore -- astounding price for contemporary Indian art.

It is back with a bang but how can this boom help us reap reach rewards because most of us can’t shell out crores for prominent artists. It is then an art fund comes into play, which will take your money, and with the help of art experts, who have an eye for such finer details, invest the money in both new and established artists, and will assure you returns of about 20 per cent a year.

So no more scouring galleries, or buying and storing. There’s also no need to block large sums of money in a single asset, so basically no worries.

Yatra begins:

In the past eight months, around four funds have been set up to deliver this service. Yatra, managed by Geeta Mehra, director of Sakshi Gallery in Mumbai, says, “There are many benefits of an art fund.

A team of art experts will make sure that there is no forgery, and ensure that the pieces bought and sold are at the best market price.” Such funds are generating huge interest. Deepak Rastogi, a London-based private equity director, has pumped in around Rs 4 crore into a similar one.

He explains, “It will be used in buying paintings and sculptures for which I don’t have the expertise or the time, and which will eventually reap rich rewards.”

Risks involved:

Such ventures, however, are not risk free. According to Himanshu Kohli, CEO of Client Associates, a wealth management fund, an art fund can pose risks. High taxes, illiquidity and high transaction costs are just a few of them. But the biggest risk, says Kohli, is conflict of interest.

“The problem is people who’re running these funds are also gallery owners. Problem arises because a gallery owner would want to sell a piece at the highest price but a fund which is also owned by him, would want to buy it at the lowest price.”

But there’s no gain without risk. Considering the hype in the art scene, which isn’t going to die down any time soon, art investment is a profitable venture.

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